Kodak plans to cut up to 23 percent of work force; digital photography squeezes film business
Thursday, January 22nd 2004, 12:00 am
By: News On 6
ROCHESTER, N.Y. (AP) _ Eastman Kodak Co., struggling to find its footing in new digital photography markets as its signature film business fades, said Thursday it will cut 12,000 to 15,000 jobs, or up to 23 percent of its global work force, over the next three years.
The announcement came as the world's biggest photography company posted a fourth-quarter profit of $19 million, or 7 cents a share, down sharply from $113 million, or 39 cents a share, a year ago.
Excluding restructuring and other one-time items, however, earnings were $199 million, or 70 cents a share. That beat the consensus forecast of 52 cents a share among analysts surveyed by Thomson First Call.
Sales rose 10 percent to $3.78 billion from $3.44 billion.
Kodak said the cuts reflect reductions in global manufacturing and selected traditional businesses as it sharpens its focus on digital photography. It will trim an estimated 2,500 to 3,500 jobs this year, it said.
The company eliminated up to 6,000 jobs in 2003, shrinking its payroll to around 64,000 from a peak of 136,500 in 1983.
Kodak said it would take charges of $1.3 billion to $1.7 billion through 2006, including up to $900 million in severance costs.
Company president Antonio Perez said the cuts are ``absolutely required for Kodak to succeed in traditional markets as well as the digital markets to which our businesses are rapidly shifting.''
Last week, Kodak said it will stop selling reloadable 35 mm film cameras in North America and Western Europe by the end of 2004.
In September, Kodak slashed its annual dividend from $1.80 to 50 cents to help fund $3 billion in acquisitions and internal growth as it shifts into the fast-growing, highly competitive digital arena.
Filmless digital cameras, which record snapshots on computer chips, have begun outselling traditional film cameras for the first time in the United States.
Kodak spent more than $840 million last year for five companies. The biggest deal was its $486 million buyout of PracticeWorks Inc., an Atlanta-based dental-imaging and software maker.
For all of 2003, Kodak earned $265 million, or 92 cents a share, down from $770 million, or $2.64 in 2002. Sales rose to $13.3 billion from $12.8 billion. The company wants to boost its revenues to $16 billion by 2006.